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TheStreet Open House

GM Needs to Do This Now to Avoid Bankruptcy

After it filed for bankruptcy in 2009, the automaker's image has remained fragile in the eye of the U.S. consumer. It was dubbed "Government Motors" after receiving a roughly $50 billion bailout from the U.S. government. 

CEO Mary Barra needs to make a stand. She needs to tell the public why they should still be walking into a dealer with a Chevrolet, Cadillac, Buick or GMC logo on the building. 

Every newspaper, Internet headline and news station is pointing out the company's blunders each day in the form of additional recalls and fines over its handling of the fatal ignition-switch problem. 

What if General Motors came out with a full 60-second television ad, with solely Barra on TV. Forget all of the Our trucks can do this and these cars get this many miles per gallon. 

Because that's not what's swaying U.S. consumers when this type of news hits. Ford's trucks do the same thing, and its cars get the same miles per gallon, arguably speaking. 

Instead, put Barra on TV, and have her apologize to customers about all of the issues GM is having. It's not her fault -- she walked into the situation in January -- but that doesn't mean consumers will give the company a pass. 

She needs to apologize on behalf of her company and explain why General Motors is still a brand to be bought and trusted, and detail why the recalls are good for the company long term. Highlight the fact that contrary to current belief, GM does care about safety and that's why there have been so many recalls. 

Once customers leave, they're hard to get back. And that's the last thing GM needs. It can't afford to lose sales. An apology ad is cheaper than lost customers. 

>>Read More: Kass: Keep Clear of the Consensus

>>Read More: Apple's 7: 1 Stock Split: Take a Bite Before June 2

>>Read More: Electric Cars Won't Make Your Air Any Cleaner


This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

At the time of publication, Kenwell had a long position in Ford. 

-- Written by Bret Kenwell in Petoskey, Mich.

Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter. Focuses on short-to-intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.
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